Despite cord-cutting and COVID, the NFL’s $110 billion deal only confirms that revenue from broadcast contracts is still what makes the sports world go.
Dak Prescott’s new four-year, $160 million contract was the culmination of over a year of negotiating between the Dallas Cowboys and the franchise quarterback. The two sides came to a stalemate before the start of the 2020 season, leaving many to wonder about Jerry Jones’ commitment to the man — and when Prescott suffered a gruesome injury during the team’s Week 5 game against the Giants, the entire matter got a lot more complicated.
Now, that’s all in the past. The Cowboys are committed to Dak for at least the next four years, and they’ve even sweetened the pot with an NFL-record $66 million signing bonus, which will help Prescott net $75 million next season. Plus, the $40 million average annual salary is the exact number Prescott was reportedly asking for last year, a number widely scoffed at by fans and cap experts at the time.
But to some, Prescott’s new deal was about more than just the Cowboys’ commitment to their quarterback, suggesting instead the imminent arrival of a massive windfall of cash for both the Cowboys and the league as a whole.
And on March 18, it all became official.
As ESPN’s Adam Schefter noted at the time the Prescott deal went down, many took it as a signal that Jones and the Dallas front office were tipping the inevitably massive TV deal that had long been rumored as being in the midst of negotiations. As far back as December, the New York Post reported the NFL’s next round of broadcasting deals would exceed $100 billion, including 10-year agreements with current partners NBC, CBS, Fox, and Disney/ESPN, and Amazon.
And they were right. For years, TV money was king in the sports world. And in 2021 and beyond, like D’Angelo Barksdale said in the first season of The Wire, we have all the evidence we need that the king stays the king.
Even amid the pandemic, a continued dip in television viewership across the board, and the number of content platforms growing by the day, the NFL remains the biggest draw on television. Football attracts advertisers in droves, and even with some ad partners dropping out of their vaunted slots in the run up to February’s Super Bowl, CBS was quickly able to fill those holes.
In fact, despite a ratings dip, the big game drew approximately $545 million in revenue from in-game ads this year, up from $450 million in 2020.
If the COVID era has taught America’s major sports leagues anything, it’s just how critical their TV partner relationships are. In a time of such serious revenue shortfalls thanks to playing game after game behind closed doors, they arguably grew more important than they’ve ever been. And a number of recent gestures from the NBA and NFL, while leaving plenty of players complaining, served to benefit broadcasters unequivocally.
The NFL added an additional playoff game in each conference in 2020 and fought through a slew of postponements throughout the regular season to ensure each game was played. In the minds of Roger Goodell and the league’s owners, the show must go on, period. It did, appeasing their TV partners with a full allotment of games despite unprecedented challenges.
Kawhi Leonard was among those who didn’t like the fact that the NBA decided to reverse course and play an All-Star Game this year, even going as far as saying that the league was “putting money over health.” This year’s game was the lowest-rated in a generation, losing 24% of viewership compared to 2020. CBS’ special two-hour Oprah Winfrey interview with Prince Harry and Meghan Markle drew three times the viewership that same night.
Even still, the All-Star Game remains the single biggest draw of Turner Sports’ NBA contract each year, and thus far has been the most-watched NBA game of this season overall.
Consider as well that the NBA paid nearly $200 million operating the Orlando “bubble” to finish off the 2019-20 season. It was ambitious and risky, but the move ultimately saved the league an estimated $1.5 billion in what would have otherwise been lost revenue.
According to both Forbes and the Sports Business Journal, a majority of the recouped money was tied to national and local television deals.
The NBA persevering and delivering for their partners even with these diminished returns will only help them as they return to the bargaining table for negotiations of their own set of new TV contracts, which would go into effect after the 2024-25 season.
The NBA and NFL aren’t the only leagues cashing in on new US television rights, of course. Last year, Major League Baseball closed on new deals with Fox and Turner through the 2028 season worth a combined $8.3 billion. This month, the NHL cashed in as well with a new ESPN deal worth approximately $420 million per season. A secondary deal worth at least $200 million is reportedly in the works for the near future.
As the war for content rages on, the sports landscape has very much sorted itself out despite challenges from cord-cutting, COVID, and beyond. The MLB and NFL are set with their old, faithful partners (though the NFL’s expanded Amazon agreement feels like a glimpse at the future). The NHL is returning to an old friend next season, while the NBA seems to be well-situated with strong relationships built with their current partners that should pay dividends in the future.
Even as viewers constantly shift their means of consumption, revenue tied to old-fashioned television viewership continues to be a boon for all four of the biggest sporting leagues in the country. The billions upon billions that networks continue to commit with little to no hesitation are the surest proof possible that there’s still no show in town quite like live professional sports at the highest level.